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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 433,491 346,520 310,000 16
GNI per capita
 US $ 2,610 2,140 1,750 97
Ranking is given out of 208 nations - (data from the World Bank)

Books on Russia


Update No: 348  (16/12/09)

A curious anniversary
Generally, nothing much happens in the second half of December in the Christian world for obvious reasons. One can even extend this generalisation to the Islamic world too, because Jesus is a great prophet for the Moslems, as is Moses. The precepts of both loom large in Islamic lore.

Something major did happen in this fallow period eighteen years ago for all that. Yeltsin wound up the USSR. He obviously felt that the end of the year was an appropriate time to see off all things Soviet, at least formally so. Gorbachev handed over the control over the Soviet nuclear arsenal to the Russian president on December 31, 1991.

What is the significance of this mighty event two decades later? Clearly, it has led to the creation of a new, non-bipolar world. The Cold War was definitively over. Russia was resurgent, which had been eclipsed in the USSR, the one republic without presidential representation at the union level. But it was reborn as a geopolitical entity in a multi-polar world, in which China and a burgeoning European Union, as yet still unspecified, counted as well as the US.

How is Russia to fit in to this new world order in the making?
Nobody has quite got the answer yet. One thing that the Russians knew for sure is what they did not want to be the case any more: they did not want to continue to be the foil of the Western world and of NATO. Yet so long as they possess a huge nuclear arsenal, it is logical that the Europeans and Americans will persist in seeing the Russians as the ultimate adversary.

President Dmitry Medvedev has proposed a new security charter and union to replace NATO. Unfortunately he has not specified what its logic and raison d'etre should be. Targeting terrorism is inadequate. It is too generic and unspecific an enemy for such a heterogeneous set of players as the various post-Cold War survivors.

Is it to be the Islamic world as a whole? Obviously a bad idea. So whom?

Ourselves - armed to the teeth with horrifically-powered weaponry is one plausible answer. But it will need a statesman to convince us of that. Where is he to be found?

Rampant nostalgia in Russia
In the interim people resort to the past and its desired phantoms. Prime Minister Vladimir Putin, a former KGB agent, has described the fall of the Soviet Union as the "the greatest geopolitical catastrophe of the century."

Kremlin critics have accused the authorities of a creeping rehabilitation of the Soviet Union to justify their clampdowns on the media and opposition parties. "There is an idealisation of the Soviet past," said Nikita Petrov, an historian from the Memorial human rights group. "It's a conscious policy. They are trying to show the Soviet authorities looking decent and attractive to today's generation." In Russia, several Soviet-themed restaurants have opened in Moscow in recent years: some hold nostalgia nights where young people dress up as pioneers -- the Soviet answer to the boy scouts and girl guides -- and dance to communist classics.

Soviet Champagne and Red October Chocolates remain favourites for birthday celebrations. "USSR" T-shirts and baseball caps can be seen across the country in summer.

The new modus vivendi?
The Hotel Moscow, an icon of Soviet architecture, is today a monument to another pervasive aspect of Russian reality: crony capitalism. Seven years ago, the city government decided to demolish and rebuild the towering, thousand-room structure just off Red Square, and awarded the contract to a U.S.-registered developer.

But the deal was annulled under murky circumstances, investigators say, in favour of business interests well connected to officialdom and organized crime. Financial irregularities have since delayed the project's completion.

The fate of the hotel is emblematic of Russia's troubling business culture. A string of similar high-profile cases in which bureaucrats, police and justice officials are suspected of using their authority to pressure or swindle foreign companies has caused an increasing number of investors to pull out, with potentially dire consequences for a flagging economy.

Foreign investment in 2009 was down 22.9 percent compared with 2008, according to the Novaye Izvestiya newspaper. In the second half of 2008 alone, an estimated $7 billion in foreign capital exited Russia.

Russia also was ranked 146th out of 180 countries in Transparency International's annual survey for 2009, which measures corruption in government and business - a drop of nearly 30 places since 2002.

The watchdog group estimated that bribery costs Russia $300 billion a year, or about 18 percent of its gross domestic product. "With the current level and volume of corruption ... we cannot move forward," Transparency International said in a statement in December. "If corruption stays as it is now, it will continue to eat up the resources" that Russia could invest in its future.

President Dmitry Medvedev has acknowledged the problem, lamenting the "legal nihilism" that has rotted the system. In a major speech, he said corruption needed to be tackled from many directions but that a solution would take time: "We won't solve the problem in a single bound, but we have to dig in."

President Putin recidivist?
Vladimir Putin has given his clearest hint yet that he is preparing to get back his old job as president during a masterful performance at his annual question and answer session with the Russian public. Putin, currently prime minister, spent more than four hours answering carefully screened questions from across Russia on subjects including the Lada car and whether the Iranians have built a nuclear bomb yet. Asked by a mining student whether he wanted to be president again, Putin replied: "I will think about it," adding "There's still plenty of time."

Ever since he made way for Dmitry Medvedev to take over the presidency in 2008 after eight years in office, there has been speculation that he is planning to return at the next presidential election in 2012. In December Putin did nothing to dispel the impression that he is Russia's most accomplished and popular politician – and that it is he who actually runs the country. Most of his questioners apparently agreed. They reverentially addressed the prime minister as "Vladimir Vladimirovich".

Putin's eighth annual phone-in was screened live on Russian TV and entitled A Conversation with Vladimir Putin: The Sequel. The event is an opportunity for Putin to demonstrate his stamina, charm and mastery of local detail. Hostile questions are weeded out – with pre-selected factory workers and studio guests "spontaneously" picked instead.

Putin said the threat of terrorism in Russia remained extremely high after 26 people were killed in early December when their luxury express travelling between Moscow and St Petersburg was apparently blown up. He promised to "break the spine" of the criminals responsible.

He signalled that the peak of Russia's economic crisis had passed, though he acknowledged the country still faced economic challenges, particularly in single industry Soviet-era towns. He addressed other voter-friendly concerns such as pensions, hospitals, and the future of Russia's struggling car and aviation industries.

The prime minister fielded inquiries on more light-hearted subjects. They included Russia's failure to qualify for the World Cup next year in South Africa, break dancing and rappers. Putin said Russian rappers were more responsible than western ones. Asked whether he liked animals, he talked keenly about Russia's tigers and leopards, and the uncertain fate of the country's Arctic polar bears.

Putin also waded into the debate on Stalin – the subject of a row this year between Russia and its eastern European partners. The Stalin era saw Soviet Russia's transformation from an agrarian to an industrial state, he said, as well as its victory in the Second World War. "If the war had been lost the consequences would have been catastrophic," he reminded his audience.

But he added: "All these positive things were achieved at an unacceptable price. Repression was real. Millions suffered from repressions. We can't forget the cult of personality or the crimes against Russia's own people. The era must be analysed in its complexity."

Putin made a few polite references to Medvedev – pointing out they had shared the same teacher at the same university in St Petersburg, who had imbued them with common values. Medvedev has recently criticised the state of Russia in a series of gloomy speeches. An upbeat Putin, by contrast, implied that all is well. He offered practical help to the country's citizens, promising new school computers to one caller.

Putin was reticent about foreign policy, formally Medvedev's brief. But he said Russia had no evidence that Iran was trying to build a nuclear weapon and declined to say whether Moscow would back sanctions. He praised the former US president George Bush as a "decent and good guy" and said he would be happy to meet him again.

He said he wanted warm relations with Ukraine and blamed Ukraine's pro-western president, Viktor Yushchenko, for the uncomfortable stand-off between Moscow and Kiev.

Only one subject roused Putin to anger: Mikhail Khodorkovsky. The oligarch was arrested in 2003 and jailed for eight years in a case most observers believe was politically motivated: Khodorkovsky had challenged Putin by funding opposition political parties. The former billionaire is currently on trial facing fresh charges that could bring 22 more years in prison.

Asked whether Khodorkovsky should be freed, Putin replied: "It isn't a question of whether he should be released but how to prevent crimes of this kind in future."

Putin said economic criminals should be dealt with in accordance with Russian law. In reality, however, this is little guarantee of justice as Russia's judges do what they are told by the Kremlin.

Putin confirmed the widespread view that his era has a long time to run – possibly until 2024, by when he would have served two more presidential terms. Asked by Leonard from Krasnodar whether he planned to spend more time with his family, Putin broke into a twinkling half-smile. He said: "Don't hold your breath."

Political analyst Stanislav Belkovsky, the founder and director of Moscow's National Strategy Institute, said it remained unclear whether Putin would return as president. "The question of who will be the next president won't be decided until early 2011. It won't be decided by Putin, or by Putin and Medvedev, but by Russia's political elite. At the moment the elite wants Medvedev because Medvedev allows them to keep their assets in the west – and is associated with the reset in relations with the US and other geo-political partners. Ultimately the elite decides, not Putin.

Well, we shall see.


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